I have been dedicated to the growth of the M2M communication market since 2003 and have been watching the so-called Internet of Things evolve since before it was widely considered a “thing.” Naturally, I am curious to see which IoT application coming down the pike gets labeled as the Next Big Thing. It seems to change every week – and with the Consumer Electronics Show’s intense focus on connected devices still visible in the rear view mirror, there’s been no recent shortage of curiosity-piquing storylines to be sure.

But when you boil it down to its elements, the Internet of Things is, today, little more than an expansion of traditional telematics, security and asset control applications. If you look to the early days of stolen vehicle management, via LoJack and others, or homing devices such as what we saw in No Country for Old Menwhen Anton found his money, you know everything you need to know when it comes to the Internet of Things. These devices communicate wirelessly with another device in the field, or back to a central server, to create value. Value, of course, is always in the eye of the beholder. Just ask Llewelyn Moss.

Over the past several months we’ve seen a flash flood of IoT hype, driven largely in my opinion by a “cow looking over the fence” mindset where people are asking, “what’s that shiny thing over there” and trying to find a way to develop new applications; not all have a well-considered purpose and business model behind them.

In turn, activity has centered upon consumer-facing applications; most have not gotten traction, from pet and teen trackers to wireless car starters. The trouble is that few have stopped to consider the long-term value proposition. For example, if we look at the connected car via brands like OnStar and Ford SYNC, there is definitely a big question mark about sustainable subscription renewals. The initial subscription is an easy sale because it gets bundled into the purchase, but the shimmer appears to wear off and consumers do not seem to be motivated to carry the service beyond an initial term.

The real challenge here is that consumer-centric applications will always fight for a tightly squeezed share of disposable consumer income. The value proposition can be exciting at first but most often loses luster over time unless it is providing tangible value. Home automation is another area worthy of closer examination. There are some points of value, such as turning off a light from afar, adjusting a thermostat or checking if you left the oven on. But has society really gotten to a place where we need our toaster to tell our iPhone that our toast is ready? Are we just being lazy if forgetting to turn off the oven no longer matters?

It’s all about delivering value. Consider this: around 1 out of every 8 iPads sold today gets shipped with a 3G/4G cellular connection built in; but then, and this is the revealing part, only about 4 percent of those units have permanent subscriptions over time. If people aren’t willing to keep their iPads connected, as this data suggests, can we really expect they’ll pay to keep their cars or their household lamps connected? Ultimately, consumer-side IoT is going to have to conjure a “cannot live without” sentiment among consumers, in much the same way that Cable Television has done in most U.S. households. Can this be done?

Up the Value Chain

On the commercial and public services side of the equation, the value is more ingrained. Going again to the connected car concept, vehicle manufacturers and leasing companies are designing IoT applications into their vehicles to provide remote maintenance monitoring, routing, fuel and mileage management, driver security, and other rich content. In these instances, the cost of integrating the application is miniscule compared to the earning potential of the vehicle. It makes fiscal sense.

If we take this one step further to transportation vehicles used by the public, the value moves up the food chain to a wider audience quickly. When you can start integrating real-time scheduling and notification systems, everybody wins. For example, I called a taxi recently and received a text message with an estimated time of arrival and a link to a map of the driver’s actual location. You can be sure I’ll use that cab company again.

There are of course limits. The idea of vehicles being able to communicate directly with the traffic and roadway infrastructure, and even among each other where a car might warn its driver of an erratic driver nearby and automatically suggest a safer route, is still in the conceptual stage. These scenarios certainly are possible technology-wise, but here is where cultural acceptance could be a barrier. For example in Singapore, the government is building a connected traffic management system, complete with sliding-scale road tolls based on time of day and traffic density. To do this, all vehicles are mandated to be equipped with tracking devices. Such a concept can happen in a “command and control” society such as Singapore, but when you talk about such mandates in North America, you get into a much different discussion. It is too Big Brother-like.

There is, however, an interesting commercial version of this concept playing out in the auto insurance market, via “Pay-How-You-Drive” programs reliant on vehicle sensor monitoring. The idea is to offer an aggressively priced premium by tracking policyholder behavior more closely in real-time. In practice, however, we’re seeing this IoT application play out more as a marketing opportunity for insurers, where they offer would-be customers a chance to “prove their deservedness” for the better rate. That appears to be where it ends; we’re seeing that these devices tend to remain in service for only a matter of weeks or months. Apparently, the parties are not realizing expected value and stop the program short.

Get out of the vehicle

Let’s now look at some other uses of the Internet of Things applications that stand to create real value, now.

Probably the biggest, and most pragmatic, use is telemedicine, specifically for “wellness management,” or actively monitoring patients 24/7. In places like the U.S. and continental Europe, medical management is about controlling costs, improving patient quality-of-life and, as a natural corollary, elevating treatment outcomes. If I were to rank the top health conditions where telemedicine is already playing a role, they would be active heart monitoring and blood pressure monitoring for at-risk patients; automated glucose monitoring for diabetes patients; prescription compliance applications to eliminate wasteful re-prescribing; and sleep apnea support for investigatory and direct courses of treatment.

When you start thinking about connected medical devices, the world of “what’s possible” really does open up. In the case of prosthetic limbs, for example, embedded devices could deliver proactive maintenance alerts to patients and surgeons, as well as provide manufacturers with new information about how prosthetics “really” get used, what kind of wear and tear they experience and where the stress points are. The outcome here is to continuously improve how artificial limbs get made.

There’s another curious opportunity for telemedicine in supporting the trend towards “Medical Tourism.” Many first-world patients are already going abroad for surgical procedures. (While counterintuitive, certain pockets of the Third World offer extremely high-quality, low-cost surgical specialties. India is renowned for heart and lung procedures for example; Eastern Europe has a reputation for high-end orthopedics). Telemedicine can help make this process more of a managed experience for patients and provide greater psychological comfort by connecting them with their actual doctors both pre- and post-procedure. Eventually, telemedicine may allow for data integration directly to the patients’ primary care physicians.

Finally, as the world’s population moves past the 7 billion mark, the spotlight is going to have to shine more brightly on crops and harvest management, just to keep the foodstuffs flowing. The Internet of Things has a big role to play in this. For example, connected devices already help farms manage and automate irrigation, monitoring soil moisture levels and weather conditions to provide the perfect amount of water right when it’s needed. The supply chain actively measures time, temperature and air chemicals of perishables in transit to minimize spoilage: do you ever wonder how your bananas or tomatoes arrive fresh from across the world? Golf courses are optimizing water use in desert locations. And, we see consumer versions of these concepts to alert home gardeners when individual plants need to be watered, although I’d have to question the marketability for such an application; most of the plantkeepers I know already keep themselves well in tune with their plants’ needs.

In Brazil, John Deere is programming its harvesters to use GPS and terrestrial data to help farmers grid the field for seeding and to minimize overlap when cutting wheat. While it may seem small, an application like this delivers immense aggregate time savings, resource savings and field efficiency gains for farm operations.

Connectivity is king

Many people are talking “what if” scenarios for areas as diverse as connected food, healthcare, gun tracking and home appliances, but if there’s no connectivity, there’s no “what if.” This is why I believe smart application providers and enterprises will cut through the confused messages about technology integration and data volume, and focus instead on delivering 3G-based wireless solutions for ubiquity, longevity and innovation. Once you can “design in” the connectivity, the magic will happen.

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